PDF Version of Release
Declares Increased Dividend of $0.85 per Share for Q4 2007
Increases 2008 Quarterly Dividend Target Rate to $0.85 per share
Announces $50 Million Share Repurchase Program
NEW YORK, Feb. 13 /PRNewswire-FirstCall/ -- Genco Shipping & Trading
Limited (NYSE: GNK) today reported its financial results for the three months
and twelve months ended December 31, 2007.
The following financial review discusses the results for the three months
and for the twelve months ended December 31, 2007 and December 31, 2006.
Fourth Quarter 2007 and Year-to-Date Highlights
- Declared a dividend of $0.85 per share, based on Q4 2007 results,
payable on or about March 7, 2008 to all shareholders of record as of
February 29, 2008;
- Excluding the $23.5 million gain on the sale of the Genco Commander,
recorded net income of $33.5 million, or $1.17 basic and $1.16 diluted
earnings per share;
- Recorded net income of $56.9 million, or $1.99 basic and $1.98 diluted
earnings per share;
- Completed the acquisition of the six drybulk vessels from companies
within Evalend Shipping Co. S.A. for an aggregate purchase price of
$336 million;
- Took delivery of the Genco Titus, one of the remaining six vessels from
the nine vessel Metrostar transaction;
- Completed the sale of the Genco Commander on December 3, 2007 and
realized a gain of $23.5 million;
- Paid a $0.66 per share dividend on November 30, 2007 based on Q3 2007
results; and
- Increased our ownership of the outstanding stock of Jinhui Shipping and
Transportation Limited to 19.4% through February 12, 2008.
Financial Review: 2007 Fourth Quarter
Excluding the $23.5 million gain on the sale of the Genco Commander, the
Company recorded net income for the fourth quarter of 2007 of $33.5 million,
or $1.17 basic and $1.16 diluted earnings per share. Net income was $56.9
million or $1.99 basic and $1.98 diluted earnings per share for the three
months ended December 31, 2007. Comparatively, for the three months ended
December 31, 2006 net income was $16.5 million or $0.65 basic and diluted
earnings per share.
EBITDA was $72.2 million for the three months ended December 31, 2007
versus $26.7 million for the three months ended December 31, 2006.
Robert Gerald Buchanan, President, commented, "During 2007, Genco
experienced significant success in important areas which benefited both the
Company and its shareholders. First, we furthered our consolidation
leadership by executing two acquisitions totaling 15 modern vessels that
expanded our world-class fleet by 173% on a tonnage basis, improved the age of
our fleet as well as diversified it to include Capesize vessels. Second, we
advanced our commercial position by signing long-term contracts during the
year for 19 vessels at attractive rates as management continues to take
advantage of the robust market environment. Going into 2008, we are pleased
to have taken delivery of the final vessel under our agreements to acquire six
drybulk vessels from affiliates of Evalend Shipping Co. S.A. and remain on
schedule to take delivery of two Capesize vessels, one later this month and
the other later this year. With the combination of having approximately 80% of
our fleet's estimated available days secured on contracts for 2008 and having
two vessels with profit sharing agreements, we are in a strong position to
provide shareholders with a high degree of earnings visibility while
maintaining the ability to benefit from future rate increases."
Genco Shipping & Trading Limited revenues increased 84% to $65.7 million
for the three months ended December 31, 2007 versus $35.7 million for the
three months ended December 31, 2006, primarily due to the operation of a
larger fleet.
The average daily time charter equivalent, or TCE, rates obtained by the
Company's fleet increased 52.4% to $31,140 per day for the three months ended
December 31, 2007 compared to $20,435 for the three months ended December 31,
2006. The increase in TCE rates was due to higher charter rates achieved in
the fourth quarter of 2007 versus the fourth quarter of 2006 for five of the
Handysize vessels, four of the Panamax vessels, and three of the Handymax
vessels in our current fleet. Furthermore, higher TCE rates were achieved in
the fourth quarter of 2007 versus the same period last year due to the
operation of four Capesize vessels, part of the Metrostar acquisition.
Total operating expenses decreased to $0.5 million for the three months
ended December 31, 2007 from $17.2 million for the three-month period ended
December 31, 2006 due to the gain on the sale of the Genco Commander, off-set
by higher vessel operating expenses and depreciation and amortization due to
the operation of a larger fleet. Vessel operating expenses were $8.1 million
for the fourth quarter of 2007 compared to $5.9 million for the same period
last year. The increase in vessel operating expenses was due to the operation
of a larger fleet, as well as higher crewing and lube expenses. Our vessel
operating expenses, which generally represent variable costs, will further
increase as a result of the expansion of our fleet, as well as anticipated
higher crewing and lube expenses going forward. Depreciation and amortization
expenses increased to $11.6 million for the fourth quarter of 2007 from $7.3
million for the fourth quarter of 2006 as a result of the operation of a
larger fleet. General and administrative expenses increased to $3.0 million
from $2.1 million during the comparative period due to higher legal expenses,
costs associated with higher employee non-cash compensation and other employee
related costs. Management fees were $0.5 million for the three months ended
December 31, 2007 and $0.4 million for the three months ended December 31,
2006, respectively, and relate to fees paid to our independent technical
managers.
Daily vessel operating expenses grew to $3,824 per vessel per day during
the fourth quarter of 2007 from $3,415 for the same quarter last year as a
result of higher crew and lube expenses. We believe daily vessel operating
expenses are best measured for comparative purposes over a 12-month period in
order to take into account all of the expenses that each vessel in our fleet
will incur over a full year of operation. For the years ended December 31,
2007 and 2006, the average daily vessel operating expenses for our fleet were
$3,716 and $3,285 respectively. Based on estimates provided by our technical
managers and management's expectations, we expect our 2008 DVOE budget to be
$4,700 per vessel per day. As previously announced, the increased budget
reflects the anticipated increased cost for crewing and lubes as well as the
operation of our Capesize vessels.
Financial Review: Twelve months 2007
Net income was $106.8 million or $4.08 basic and $4.06 diluted earnings
per share, for the twelve months ended December 31, 2007 compared to $63.5
million, or $2.51 basic and diluted earnings per share for the twelve months
ended December 31, 2006. Included in net income for the twelve months ended
December 31, 2007 is a $27.0 million total gain on the sales of the Genco
Commander and the Genco Glory and a $3.6 million one time, non-cash deferred
financing charge as a result of the retirement of our previous credit
facilities.
Revenues increased 39.1% to $185.4 million for the twelve months ended
December 31, 2007 compared to $133.2 million for the twelve months ended
December 31, 2006 as a result of the operation of a larger fleet as well as
higher TCE rates achieved. EBITDA was $161.1 million for the twelve months
ended December 31, 2007 versus $100.8 for the twelve months ended December 31,
2006. TCE rates obtained by the Company increased 20.5% to $24,650 per day for
the twelve months ended December 31, 2007 from $20,455 for the same period in
2006. Total operating expenses for the twelve months ended December 31, 2007
decreased to $54.3 million from $62.9 million for the twelve months ended
December 31, 2006 primarily due to the $27.0 million total gain on the sales
of the Genco Commander and Genco Glory, off-set by higher vessel operating
expenses and depreciation and amortization due to the operation of a larger
fleet. Daily vessel operating expenses per vessel were $3,716 versus $3,285
for the comparative periods.
Liquidity and Capital Resources
Cash Flow
Net cash provided by operating activities for the twelve months ended
December 31, 2007 and 2006, was $120.9 million and $90.1 million,
respectively. The increase was primarily due to the operation of a larger
fleet, which contributed to increases in net income, depreciation, accounts
payable, and deferred revenues, an unrealized loss of $1.4 million associated
with the forward currency contracts in place at December 31, 2007, and cash
outflows of $9.9 million associated with forward currency contracts used to
hedge our Jinhui shareholdings. The increases were offset by an unrealized
gain of $10.2 million on the currency translation associated with our
investment in Jinhui Shipping & Transportation Limited, a $27.0 million gain
related to the sale of the Genco Commander and the Genco Glory for the year
ended December 31, 2007. Net cash provided by operating activities for the
year ended December 31, 2007 was primarily a result of recorded net income of
$106.8 million, less the gain from the sale of the Genco Commander and the
Genco Glory of $27.0 million, plus depreciation and amortization charges of
$34.4 million.
Net cash used in investing activities increased to $984.4 million for the
year ended December 31, 2007 as compared to $82.8 for the year ended December
31, 2006. For the year ended December 31, 2007, cash used in investing
activities related primarily to the purchase of $115.6 million of Jinhui
stock, the purchase of vessels in the amount of $764.6 million, and deposits
made on vessels to be acquired of $150.3 million. The increases were offset by
total proceeds received from the sales of the Genco Commander and the Genco
Glory of $56.5 million.
Net cash provided by financing activities for the years ended December 31,
2007 and 2006 was $861.4 million and $19.4 million, respectively. For the
year ended December 31, 2007, net cash provided by financing activities
consisted of the drawdown of $77.0 million related to the purchase of shares
of Jinhui stock, the receipt of $213.9 million in proceeds from the follow-on
equity offering, the drawdown of $1,193.0 million on our 2007 Credit Facility
related to the completion of nine vessel acquisitions and deposits on six
vessels to be acquired. This was offset by the refinancing of our prior
credit facilities for $288.9 million and the repayment of $257.0 million under
the 2007 credit facility and the payment of cash dividends of $69.6 million.
For the year ended December 31, 2006, net cash used by financing activities
consisted mostly of the payment of cash dividends of $61.0 million offset by
$81.3 million of proceeds from our 2005 Credit Facility used to acquire three
vessels.
Capital Expenditures
We make capital expenditures from time to time in connection with vessel
acquisitions. Our current fleet consists of four Capesize drybulk carriers,
seven Panamax drybulk carriers, three Supramax drybulk carriers, six Handymax
drybulk carriers and eight Handysize drybulk carriers. After the sale of the
Genco Trader and the delivery of the five remaining vessels from companies
within the Metrostar Management Corporation group, Genco Shipping & Trading
Limited will own a fleet of 32 drybulk vessels, consisting of nine Capesize,
six Panamax, three Supramax, six Handymax and eight Handysize vessels, with a
carrying capacity of approximately 2,700,000 dwt.
In addition to acquisitions that we may undertake in future periods, we
will incur additional capital expenditures due to special surveys and
drydockings for our fleet. We estimate that one vessel will be drydocked
during the first quarter of 2008.
An additional six vessels are estimated to be drydocked in 2008 and five
in 2009. We estimate our drydocking costs for our fleet through 2009 to be:
Q1 2008 Q2 - Q4 2008 2009
Estimated Costs (1) $0.5 million $4.1 million $3.7 million
Estimated Offhire Days (2) 20 120 100
(1) Estimates are based on our budgeted cost of drydocking our vessels in
China. Actual costs will vary based on various factors, including
where the drydockings are actually performed. We expect to fund these
costs with cash from operations.
(2) Assumes 20 days per drydocking per vessel. Actual length will vary
based on the condition of the vessel, yard schedules and other
factors.
The Genco Surprise completed its drydocking during the fourth quarter of
2007 at a cost of approximately $0.9 million.
Announcement of Share Repurchase Authorization
The Company also announced that its Board of Directors has approved a
share repurchase program for up to a total of $50 million of the Company's
common stock. The Board will review the program after 12 months. Share
repurchases will be made from time to time for cash in open market
transactions at prevailing market prices or in privately negotiated
transactions. The timing and amount of purchases under the program will be
determined by management based upon market conditions and other factors.
Purchases may be made pursuant to a program adopted under Rule 10b5-1 under
the Securities Exchange Act. The program does not require the Company to
purchase any specific number or amount of shares and may be suspended or
reinstated at any time in the Company's discretion and without notice.
Repurchases will be subject to restrictions under our $1.4 billion credit
facility.
Summary Consolidated Financial and Other Data
The following table summarizes Genco Shipping & Trading Limited's selected
consolidated financial and other data for the periods indicated below.
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
(Dollars in thousands, except (Dollars in thousands, except
share and per share data) share and per share data)
(unaudited) (unaudited)
INCOME STATEMENT
DATA:
Revenues $65,690 $35,715 $185,387 $133,232
Operating expenses:
Voyage expenses 817 1,490 5,100 4,710
Vessel operating
expenses 8,086 5,881 27,622 20,903
General and
administrative
expenses 2,968 2,073 12,610 8,882
Management fees 497 392 1,654 1,439
Depreciation and
amortization 11,600 7,341 34,378 26,978
Gain on sale of
vessel (23,473) - (27,047) -
Total
operating
expenses 495 17,177 54,317 62,912
Operating income 65,195 18,538 131,070 70,320
Other (expense)
income:
(Loss) Gain
from derivative
instruments (146) 107 (1,265) 108
Interest income 729 1,049 3,507 3,129
Interest expense (8,847) (3,176) (26,503) (10,035)
Other (expense)
income: (8,264) (2,020) (24,261) (6,798)
Net income $56,931 $16,518 $106,809 $63,522
Earnings per
share - basic $1.99 $0.65 $4.08 $2.51
Earnings per
share - diluted $1.98 $0.65 $4.06 $2.51
Weighted average
shares
outstanding -
basic 28,676,374 25,302,154 26,165,600 25,278,726
Weighted average
shares
outstanding -
diluted 28,825,746 25,390,662 26,297,521 25,351,297
December 31, December 31,
2007 2006
BALANCE SHEET
DATA: (unaudited)
Cash $71,496 $73,554
Current assets,
including cash 267,594 88,118
Total assets 1,653,272 578,262
Current liabilities,
including current portion
of long-term debt 70,364 15,173
Total long-term
debt, including
current portion 936,000 211,933
Shareholders' equity 622,185 353,533
Twelve Months Ended
December 31, December 31,
2007 2006
(unaudited)
Net cash provided by
operating activities $120,862 $90,068
Net cash used in investing
activities (984,350) (82,840)
Net cash provided by
(used in) financing activities 861,430 19,414
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
FLEET DATA: (unaudited) (unaudited)
Total number of
vessels at end
of period 27 20 27 20
Average number
of vessels (1) 23.0 18.7 20.4 17.4
Total ownership
days for fleet (2) 2,115 1,722 7,434 6,363
Total available
days for fleet (3) 2,083 1,675 7,314 6,283
Total operating
days for fleet (4) 2,054 1,668 7,220 6,237
Fleet
utilization (5) 98.6% 99.6% 98.7% 99.3%
AVERAGE DAILY
RESULTS:
Time charter
equivalent (6) $31,140 $20,435 $24,650 $20,455
Daily vessel
operating
expenses per
vessel (7) 3,824 3,415 3,716 3,285
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
(Dollars in thousands) (Dollars in thousands)
EBITDA
Reconciliation: (unaudited) (unaudited)
Net Income $56,931 $16,518 $106,809 $63,522
+ Net interest
expense 8,118 2,127 22,996 6,906
+ Depreciation
and
amortization 11,600 7,341 34,378 26,978
+ Amortization
of nonvested
stock
compensation 438 255 2,078 1,589
+ Amortization
of value of
time
charters
acquired (4,880) 466 (5,139) 1,850
EBITDA (8) 72,207 26,707 161,122 100,845
(1) Average number of vessels is the number of vessels that constituted
our fleet for the relevant period, as measured by the sum of the
number of days each vessel was part of our fleet during the period
divided by the number of calendar days in that period.
(2) We define ownership days as the aggregate number of days in a period
during which each vessel in our fleet has been owned by us. Ownership
days are an indicator of the size of our fleet over a period and
affect both the amount of revenues and the amount of expenses that we
record during a period.
(3) We define available days as the number of our ownership days less the
aggregate number of days that our vessels are off-hire due to
scheduled repairs or repairs under guarantee, vessel upgrades or
special surveys and the aggregate amount of time that we spend
positioning our vessels. Companies in the shipping industry generally
use available days to measure the number of days in a period during
which vessels should be capable of generating revenues.
(4) We define operating days as the number of our available days in a
period less the aggregate number of days that our vessels are off-hire
due to unforeseen circumstances. The shipping industry uses operating
days to measure the aggregate number of days in a period during which
vessels actually generate revenues.
(5) We calculate fleet utilization by dividing the number of our operating
days during a period by the number of our available days during the
period. The shipping industry uses fleet utilization to measure a
company's efficiency in finding suitable employment for its vessels
and minimizing the number of days that its vessels are off-hire for
reasons other than scheduled repairs or repairs under guarantee,
vessel upgrades, special surveys or vessel positioning.
(6) We define TCE rates as our net voyage revenue (voyage revenues less
voyage expenses) divided by the number of our available days during
the period, which is consistent with industry standards. TCE rate is a
common shipping industry performance measure used primarily to compare
daily earnings generated by vessels on time charters with daily
earnings generated by vessels on voyage charters, because charterhire
rates for vessels on voyage charters are generally not expressed in
per-day amounts while charterhire rates for vessels on time charters
generally are expressed in such amounts. Since some vessels were
acquired with an existing time charter at a below-market rate, we
allocated the purchase price between the vessel and an intangible
liability for the value assigned to the below-market charterhire.
This intangible liability is amortized as an increase to voyage
revenues over the minimum remaining term of the charter.
(7) We define daily vessel operating expenses to include crew wages and
related costs, the cost of insurance expenses relating to repairs and
maintenance (excluding drydocking), the costs of spares and consumable
stores, tonnage taxes and other miscellaneous expenses. Daily vessel
operating expenses are calculated by dividing vessel operating
expenses by ownership days for the relevant period.
(8) EBITDA represents net income plus net interest expense, income tax
expense, depreciation and amortization, amortization of nonvested
stock compensation, and amortization of the value of time charter
acquired. EBITDA is included because it is used by management and
certain investors as a measure of operating performance. EBITDA is
used by analysts in the shipping industry as a common performance
measure to compare results across peers. Our management uses EBITDA as
a performance measure in consolidating internal financial statements
and it is presented for review at our board meetings. EBITDA is also
used by our lenders in certain loan covenants. For these reasons, we
believe that EBITDA is a useful measure to present to our investors.
EBITDA is not an item recognized by U.S. GAAP and should not be
considered as an alternative to net income, operating income or any
other indicator of a company's operating performance required by U.S.
GAAP. EBITDA is not a source of liquidity or cash flows as shown in
our consolidated statement of cash flows. The definition of EBITDA
used here may not be comparable to that used by other companies.
Genco Shipping & Trading Limited's Fleet
Our current fleet consists of four Capesize, seven Panamax, three
Supramax, six Handymax and eight Handysize drybulk carriers with an aggregate
carrying capacity of approximately 1,909,000 dwt. Our current fleet contains
six groups of sister ships, which are vessels of virtually identical sizes and
specifications. We believe that maintaining a fleet that includes sister
ships reduces costs by creating economies of scale in the maintenance, supply
and crewing of our vessels. As of December 31, 2007, the average age of our
current fleet was 6.8 years, as compared to the average age for the world
fleet of approximately 16 years for the drybulk shipping segments in which we
compete. All of the vessels in our current fleet are currently on long-term
time charters with an average remaining life of approximately 19.5 months as
of December 31, 2007.
The following table reflects the current employment of Genco's current
fleet as well as the employment or other status of vessels expected to join
Genco's fleet:
Cash Revenue
Year Charter Daily Daily Expected
Built Expiration Rate Rate Delivery
Vessel Charterer (1) (2) (3) (4)
Capesize
Vessels
Cargill
Genco International December
Augustus 2007 S.A. 2009 45,263 62,750 -
Cargill
Genco International January
Tiberius 2007 S.A. 2010 45,263 62,750 -
Genco London SK Shipping Co., August
2007 Ltd. 2010 57,500 64,250
Genco Titus Cargill
International September
2007 S.A. 2011 45,000(5) 46,250 -
Cargill 54 to 62
Genco International months from Q1
Constantine 2008(6) S.A. delivery date 52,750(7) 2008
To be
Genco determined Q4
Hadrian 2008(6) ("TBD") TBD TBD 2008
Genco Q2
Commodus 2009(6) TBD TBD TBD 2009
Q2
Genco Maximus 2009(6) TBD TBD TBD 2009
Genco Q3
Claudius 2009(6) TBD TBD TBD 2009
Panamax
Vessels
Cargill
Genco International
Beauty 1999 S.A. May 2009 31,500 -
Genco Knight 1999 SK Shipping Ltd. May 2009 37,700 -
Genco December
Leader 1999 A/S Klaveness 2008 25,650(8) -
Genco February
Trader(9) 1990 Baumarine AS 2008 25,750(8) -
Genco STX Panocean (UK)
Vigour 1999 Co. Ltd. March 2009 29,000(10) -
Genco STX Panocean (UK)
Acheron 1999 Co. Ltd. March 2008 30,000 -
Genco Hanjin Shipping December
Surprise 1998 Co., Ltd. 2010 42,100(11) -
Supramax
Vessels
Genco
Predator 2005 Intermare February
Transport GmbH 2008 22,500(12) 47,200 -
Oldendorff GmbH & 3 to 5
Co. KG. months from
delivery
to new
charterer 55,000
Hyundai Merchant
Genco Marine November
Warrior 2005 Co. Ltd. 2010 38,750 -
Genco Pacific Basin
Hunter 2007 Chartering Ltd. March 2008 65,000 -
Handymax
Vessels
Genco Success 1997 March 2008/
Korea Line February 24,000/
Corporation 2011 33,000(13) -
Genco Pacific Basin
Carrier 1998 Chartering Ltd. March 2008 24,000 -
Genco Pacific Basin
Prosperity 1997 Chartering Ltd. April 2008 26,000 -
Hyundai Merchant
Genco Marine March 2008 24,000(14) -
Wisdom 1997 Co. Ltd. February 2011 34,500
Genco NYK Bulkship
Marine 1996 Europe S.A. March 2008 24,000 -
Genco Oldendorff GmbH &
Muse 2001 Co. KG. March 2008 58,000 -
Handysize
Vessels
Genco Lauritzen
Explorer 1999 Bulkers A/S August 2009 19,500 -
Genco Lauritzen
Pioneer 1999 Bulkers A/S August 2009 19,500 -
Genco Lauritzen
Progress 1999 Bulkers A/S August 2009 19,500 -
Genco Lauritzen
Reliance 1999 Bulkers A/S August 2009 19,500 -
Genco Lauritzen
Sugar 1998 Bulkers A/S August 2009 19,500 -
Genco Pacific Basin November
Charger 2005 Chartering Ltd. 2010 24,000 -
Genco Pacific Basin November
Challenger 2003 Chartering Ltd. 2010 24,000 -
Genco Pacific Basin December
Champion 2006 Chartering Ltd. 2010 24,000 -
(1) The charter expiration dates presented represent the earliest dates
that our charters may be terminated in the ordinary course. Except
for the Genco Titus, under the terms of each contract, the charterer
is entitled to extend time charters from two to four months in order
to complete the vessel's final voyage plus any time the vessel has
been off-hire. The charterer of the Genco Titus has the option to
extend the charter for a period of one year.
(2) Time charter rates presented are the gross daily charterhire rates
before the payments of brokerage commissions ranging from 1.25% to
6.25% to third parties, except as indicated for the Genco Trader and
the Genco Leader in note 8 below. In a time charter, the charterer is
responsible for voyage expenses such as bunkers, port expenses,
agents' fees and canal dues.
(3) For the vessels acquired with a below-market time charter rate, the
approximate amount of revenue on a daily basis to be recognized as
revenues is displayed in the column named "Revenue Daily Rate" and is
net of any third-party commissions. Since these vessels were acquired
with existing time charters with below-market rates, we allocated the
purchase price between the respective vessel and an intangible
liability for the value assigned to the below-market charterhire.
This intangible liability is amortized as an increase to voyage
revenues over the minimum remaining term of the charter. For cash
flow purposes, we will continue to receive the rate presented in the
"Cash Daily Rate" column until the charter expires.
(4) Dates for vessels being delivered in the future are estimates based
on guidance received from the sellers and/or the respective
shipyards.
(5) The charter includes a 50 percent index-based profit sharing
component.
(6) Year built for vessels being delivered in the future are estimates
based on guidance received from the sellers and/or the respective
shipyards.
(7) The Genco Constantine is scheduled to be on charter with Cargill
International S.A., for 54 to 62 months at a gross rate of $52,750
per day, less a 5% third party brokerage commission. The charter
also includes a 50 percent index-based profit sharing component.
(8) For the Genco Leader and the Genco Trader, the time charter rate
presented is the net daily charterhire rate. There are no payments of
brokerage commissions associated with these time charters.
(9) We have entered into an agreement to sell the Genco Trader to SW
Shipping Co., Ltd. for approximately $44 million, less a 2% brokerage
commission. The delivery is expected to occur in the first quarter
of 2008.
(10) We have entered into a time charter for 23 to 25 months at a rate of
$33,000 per day for the first 11 months, $25,000 per day for the
following 11 months and $29,000 per day thereafter, less a 5% third-
party brokerage commission. For purposes of revenue recognition, the
time charter contract is reflected on a straight-line basis at
approximately $29,000 per day for 23 to 25 months in accordance with
generally accepted accounting principles in the United States, or
U.S. GAAP. The time charter, commenced following the expiration of
the vessel's previous time charter on May 5, 2007.
(11) The new charter commenced following the expiration of the previous
charter on January 31, 2008.
(12) The Genco Predator is currently on charter with Intermare Transport
GmbH at a gross rate of $22,500 per day. The charter is due to expire
between February 2008 and March 2008.
(13) We intend to extend the time charter for an additional 35 to 37.5
months at a rate of $40,000 per day for the first 12 months, $33,000
per day for the following 12 months and $26,000 per day for the next
12 months and $33,000 thereafter less a 5% third-party brokerage
commission. In all cases the rate for the duration of the time
charter will average $33,000. For purposes of revenue recognition,
the time charter contract is reflected on a straight-line basis at
approximately $33,000 per day for 35 to 37.5 months in accordance
with generally accepted accounting principles in the United States,
or U.S. GAAP. The new charter will commence following the expiration
of the previous charter on March 1, 2008.
(14) We have reached an agreement to extend the time charter for an
additional 35 to 37.5 months at a rate of $34,500 per day less a 5%
third party brokerage commission. The new charter will commence
following the expiration of the previous charter on March 1, 2008.
Q4 2007 Dividend Announcement
The Company's Board of Directors declared a fourth quarter 2007 dividend
of $0.85 per share payable on or about March 7, 2008 to all shareholders of
record as of February 29, 2008. As previously announced, the Company plans to
declare quarterly dividends to shareholders by each February, May, August and
November, in amounts substantially equal to its available cash from operations
during the previous quarter, less cash expenses for that quarter (principally
vessel operating expenses and debt service) and any reserves the Board of
Directors determines the Company should maintain. These reserves may cover,
among other things: drydocking, repairs, claims, liabilities and other
obligations, interest expense and debt amortization, acquisitions of
additional assets and working capital. The Q4 2007 dividend of $0.85 equates
to an annualized yield of 6.8% based on the closing price of Genco Shipping &
Trading's common stock as of February 12, 2008 at $50.32.
John C. Wobensmith, Chief Financial Officer, commented, "We are pleased to
once again increase our quarterly dividend and target rate for the year, which
reflects the Company's significant earnings power and focus on seeking to
provide consistent dividend growth over the long term. More notably we
continue to grow our dividend while expanding our fleet. This success is a
testimony to the sizeable cash flows we generate and retain as well as the
ongoing support we receive from the banking and capital markets. During 2007,
we further increased our financial flexibility by entering into a 10-year,
$1.4 billion revolving credit facility at an attractive rate and completed an
approximately $213.9 million equity offering that we used to pay down debt and
ready the Company for future growth. Going forward, we intend to continue to
seek to consolidate the industry in a manner that meets our strict earnings
and cash flow criteria as well as return on capital hurdles. Complementing
this proven approach, we intend to distribute sizeable dividends while looking
for opportunities under our new share repurchase program to create additional
shareholder value."
About Genco Shipping & Trading Limited
Genco Shipping & Trading Limited transports iron ore, coal, grain, steel
products and other drybulk cargoes along worldwide shipping routes. Genco
Shipping & Trading Limited currently owns a fleet of 28 drybulk vessels
consisting of four Capesize, seven Panamax, three Supramax, six Handymax and
eight Handysize vessels, with a carrying capacity of approximately 1,909,000
dwt. After the sale of the Genco Trader as well as the delivery of the five
remaining Capesize vessels from companies within the Metrostar Management
Corporation group, Genco Shipping & Trading Limited will own a fleet of 32
drybulk vessels, consisting of nine Capesize, six Panamax, three Supramax, six
Handymax and eight Handysize vessels, with a carrying capacity of
approximately 2,700,000 dwt.
Conference Call Announcement
Genco Shipping & Trading Limited announced that it will hold a conference
call on Thursday, February 14, 2008 at 8:30 a.m. Eastern Time, to discuss its
2007 fourth quarter financial results. The conference call and a presentation
will be simultaneously webcast and will be available on the Company's website,
www.GencoShipping.com. To access the conference call, dial (877) 795-3635 or
(719) 325-4835 and enter passcode 4694857. A replay of the conference call
can also be accessed through February 28, 2008 by dialing (888) 203-1112 or
(719) 457-0820 and entering the passcode 4694857. The Company intends to place
additional materials related to the earnings announcement, including a slide
presentation, on its website prior to the conference call.
"Safe Harbor" Statement Under the Private Securities Litigation
Reform Act of 1995
This press release contains forward-looking statements made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward looking statements are based on management's current
expectations and observations. Included among the factors that, in our view,
could cause actual results to differ materially from the forward looking
statements contained in this report are the following: (i) changes in demand
or rates in the drybulk shipping industry; (ii) changes in the supply of or
demand for drybulk products, generally or in particular regions; (iii) changes
in the supply of drybulk carriers including newbuilding of vessels or lower
than anticipated scrapping of older vessels; (iv) changes in rules and
regulations applicable to the cargo industry, including, without limitation,
legislation adopted by international organizations or by individual countries
and actions taken by regulatory authorities; (v) increases in costs and
expenses including but not limited to: crew wages, insurance, provisions,
repairs, maintenance and general and administrative expenses; (vi) the
adequacy of our insurance arrangements; (vii) changes in general domestic and
international political conditions; (viii) changes in the condition of the
Company's vessels or applicable maintenance or regulatory standards (which may
affect, among other things, our anticipated drydocking or maintenance and
repair costs) and unanticipated drydock expenditures; (ix) the number of
offhire days needed to complete repairs on vessels and the timing and amount
of any reimbursement by our insurance carriers for insurance claims including
offhire days; (x) the Company's acquisition or disposition of vessels; (xi)
the fulfillment of the closing conditions under the Company's agreement to
acquire the remaining five drybulk vessels from companies within the
Metrostar Management Corporation group; (xii) the fulfillment of the closing
conditions under Company's agreement to sell the Genco Trader; and other
factors listed from time to time in our public filings with the Securities and
Exchange Commission, including, without limitation, the Company's Annual
Report on Form 10-K for the year ended December 31, 2006, its quarterly
reports on Form 10-Q and its reports on Form 8-K. Our ability to pay dividends
in any period will depend upon factors, including the limitations under our
loan agreements, applicable provisions of Marshall Islands law and the final
determination by the Board of Directors each quarter after its review of our
financial performance. The timing and amount of dividends, if any, could also
be affected by factors affecting cash flows, results of operations, required
capital expenditures, or reserves. As a result, the amount of dividends
actually paid may vary.
SOURCE Genco Shipping & Trading Limited
CONTACT:
John C. Wobensmith, Chief Financial Officer, Genco Shipping &
Trading Limited, +1-646-443-8555
Web site: http://www.gencoshipping.com
(GNK)